2015 (3) TMI 201 - AT - Customs

Denial of refund claim - Unjust enrichment - Held that - even when Section 27 had provisions relating to provisional assessment prior to when Section 18 was not amended prior to 2006 to incorporate the provisions of the bar of unjust enrichment, the provisions of the bar of unjust enrichment would not apply. The bar of unjust enrichment arises after process of finalization of adjustment of duty and assessment is completed, and thereafter the Larger Bench of the tribunal arrived at the decision that in case of security deposit made provisionally and the assessment was finalized, the bar of unjust enrichment is not applicable. The same view was taken by the Larger Bench of the Tribunal in the case of Panasonic Battery India Co. Ltd. (2013 (9) TMI 652 - CESTAT AHMEDABAD). bar of unjust enrichment is not applicable - Decided in favour of assessee.

Summary

Issues:
- Appeal against rejection of refund claim based on unjust enrichment.

Analysis:
1. The appellant imported goods under Project Import Regulation, made a security deposit, and paid duty provisionally. After final assessments, it was found that the security deposit exceeded the duty payable, leading to a refund claim rejection due to unjust enrichment.

2. The appellant argued that unjust enrichment does not apply to security deposits at the time of clearance, citing decisions like Hindustan Zinc Ltd. case. The respondent contended that all refunds must pass the unjust enrichment bar, referring to the Bussa Overseas & Properties case upheld by the Apex Court.

3. The Tribunal considered the arguments and case laws cited by both sides. It noted the Hindustan Zinc Ltd. case's interpretation that unjust enrichment does not apply to security deposits made provisionally when assessments are finalized. This view was supported by the Panasonic Battery India Co. Ltd. case and the Supreme Court's decision in Allied Photographic India Ltd. case.

4. The Tribunal highlighted that the law distinguishes between making a refund and claiming a refund. It emphasized that the amendment in Section 18(5) post-2006 is not retrospective, and the doctrine of unjust enrichment does not apply to refunds from finalization of provisional assessments pre-25/06/1999.

5. Based on the precedents and interpretations, the Tribunal ruled in favor of the appellant, holding that unjust enrichment does not apply to the case at hand. Consequently, the impugned order rejecting the refund claim was set aside, and the appeal was allowed.